Post Office Horizon System

Andrew Bridgen Excerpts

Monday 29th June 2015 Commons Chamber

[Andrew Bridgen (North West Leicestershire) (Con)]

I pay tribute to the work carried out on this issue by James Arbuthnot, the former Member for North East Hampshire, and Mike Wood, the former Member for Batley and Spen, both of whom I worked with for more than two years in a working party in search of a fair settlement on this matter. Unfortunately, throughout the process we all lost faith and trust in the Post Office’s willingness to investigate the issue properly and thoroughly.

To give some background on how the Post Office has let down sub-postmasters and Members of this House throughout this process, let us consider how it has dealt with the matter from the outset. The Horizon accounting system used by sub-postmasters was introduced some 15 years ago. Almost immediately, a spate of discrepancies began to appear as sub-postmasters attempted to balance their accounts at the end of the day. From that time forward, there has been failing after failing on the part of the Post Office.

The Post Office has finally acknowledged that its help system for the Horizon software was completely inadequate, but even with that admission the Post Office continues in its failure to demonstrate any appetite to deal with issues arising from the Horizon system in a fair and transparent way.

[Jim Shannon (Strangford) (DUP)]

Is there not something disgraceful in the fact that criminal charges were pressed against these sub-postmasters and sub-postmistresses when the fault lay with the Post Office, yet nearly two years after the investigations those charges have not been lifted? The shadow hanging over their heads has not been lifted either. Does the hon. Gentleman not feel that it is time to bring that to an end?

[Andrew Bridgen]

The hon. Gentleman tells a tale which has been told too long to the working group. We need to bring matters to a head and I hope the debate tonight will give us an opportunity to do so.

The mediation scheme that was set up to handle disputes about the software system has not delivered what Members of this House had understood was agreed at its inception. It was flawed in a number of ways, the most significant being that it excluded those who had pleaded guilty.

[Mr Ranil Jayawardena (North East Hampshire) (Con)]

My constituent, Jo Hamilton, has her case in front of the Criminal Cases Review Commission. Does my hon. Friend agree that for those who pleaded guilty, the CCRC should be given powers to obtain all the papers that it needs from private sector organisations and full access to all Post Office files?

[Andrew Bridgen]

My hon. Friend makes a good point and he is right. Many people pleaded guilty on advice from lawyers or out of fear of losing their liberty in a lengthy and expensive court battle with the Post Office.

The House should know that the Horizon system has no adequate suspense account function, so it pushes the sub-postmaster who wants to balance his books when the books actually do not balance. This is false accounting and a criminal offence. However, I have seen correspondence that shows that the Post Office has advised sub-postmasters to keep any surplus balances that they discover at the close of business in their safe so that they can put them back when they have a shortage. That is also false accounting and is also a criminal offence.

A further flaw is the fact that issues of concern to the forensic accountants Second Sight, appointed by the Post Office at the request of the working group to assess independently the mediation cases, have been specifically excluded from mediation—for example, the absence or the ignorance on the part of the sub-postmaster of the contract they were under, and the failure of audits and investigation—despite the agreement of Post Office Ltd with Members of this House that the scheme would cover all these issues. This is resulting in what I believe to be 90% of the cases in dispute being excluded from the mediation scheme. This mediation has proven to be a shadow of what was agreed with Members.

I first became involved in this matter several years ago when my constituent Michael Rudkin brought his case to me. My constituent had 15 years’ experience as a postmaster and served as a senior member of the national executive. Indeed, he was chairman of the negotiating committee, the most senior post within the National Federation of SubPostmasters, responsible for national negotiations with Post Office Ltd and Royal Mail Group. In short, my constituent knew his job and the organisation inside out. He knew the organisation to the extent that on a visit to the Post Office headquarters in Bracknell, he was shown in error a room where operatives had remote access to the Horizon software and it was demonstrated to him how postmasters’ accounts could be altered remotely. The House should know that the Post Office has always maintained that it is not possible to alter accounts in a sub-post office remotely. However, it has recently admitted that this was not the truth.

In a debate in December I went into the details of Mr Rudkin’s case. To summarise, his post office branch had a loss in the accounts in excess of £44,000. He was absolved of any knowledge of this loss by Post Office Ltd but ordered to pay back the money at £1,000 per month from his salary. After he had paid back £13,000, Post Office Ltd started proceedings against Mr Rudkin’s wife for theft and false accounting. It also applied for a confiscation order to be placed on all his property and had his bank accounts frozen using the Proceeds of Crime Act 2002. This all occurred after my constituent had witnessed the operatives in Post Office headquarters demonstrating their remote access to the Horizon system.

My constituent has gone through the mediation scheme and his experience is that the professional advisers, Aver Ltd, Bill Cleghorn and Emma Porter, are very good. Second Sight has been extremely fair, professional and accurate in its analysis of both systemic and thematic issues within Post Office Ltd. However, the same cannot be said of the Post Office itself. I and my constituent have no faith in its ability to resolve the matter. It is said that justice delayed is justice denied, and this matter has simply dragged on for too long, with the Post Office seemingly looking for ever more reasons to delay the truth of the matter coming out.

[Peter Heaton-Jones (North Devon) (Con)]

In the past five days I have been alerted to a case in my constituency. Very briefly, the sub-postmistress emailed me to say:

“My post office has been audited today and has been closed due to financial discrepancies as a result, I believe, of the inadequacies of the Horizon system.”

That has left the village without a post office service, and obviously it is also putting an intolerable strain on my constituent. I would be grateful if my hon. Friend and the Minister considered the impact that that is having.

[Andrew Bridgen]

My hon. Friend is quite right. When we hear a Post Office spokesperson stating,

“I am really sorry if people have faced lifestyle problems as a result of their having been working in Post Office branches”,

we have to wonder whether the organisation is even aware of the misery it has caused. The fact that Post Office Ltd believes that honest, decent, hard-working people losing their homes, their businesses, their savings, their reputation and, worst of all, in some cases their liberty can be quantified as a “lifestyle change” only serves to show that the organisation is not fit to conduct an inquiry into the matter.

The Post Office mediation scheme has proven to be a sham, Second Sight has proven to be far too independent for the Post Office to stand, and the disdain that has been shown to Members of this House and to sub-postmasters is a disgrace.

[Matt Warman (Boston and Skegness) (Con)]

Does my hon. Friend agree with my constituents Mr and Mrs Hedges, who are sub-postmasters, that in this case the Post Office has treated not only them but this House with contempt?

[Andrew Bridgen]

Indeed. When we look at the cross-section of Members who have raised the matter, many of whom have served at the highest levels of Government, and who all believe that their constituents have been wronged, how can the Post Office believe that it can continue to sweep the matter under the carpet?

It is most interesting that after two years in which the Post Office has consistently claimed that its Horizon system software is robust and 100% reliable, I now have in my position an email clearly showing that the Post Office is now urgently seeking a replacement software system from IBM. I am sure that the Minister can draw his own conclusion from the happy coincidence that the investigation is now closed. It appears to me that it is indeed now sunset for the Horizon system.

It is therefore my belief, and the view of many Members across the House, that the matter must now be taken away from the Post Office and a judicial inquiry set up. The Post Office has abused its privileged position and sought to cover up its failings by way of a wholly non-transparent approach to the mediation process.

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

Concerns about the Horizon system are clearly of long standing. In the few weeks that I have been here I have heard from at least three constituents who have long-standing concerns about the Horizon system, and there are huge problems that are historic. I understand from one constituent that an injunction has been taken out against her for the sale of a property—

[Madam Deputy Speaker (Natascha Engel)]

Order. That intervention has been slightly too long.

[Andrew Bridgen]

I am not surprised to hear that from the hon. Gentleman. The management style of the senior management at the Post Office is Dickensian, and they have an almost feudal relationship with their sub-postmasters. This is now a national scandal. The Post Office has demonstrated that it is incapable of putting its own house in order, so it falls to this House and to this Government to do so for it. I therefore respectfully ask the Minister for a full judicial review into the Post Office Horizon system and the way in which the Post Office contracts with is sub-postmasters and sub-postmistresses.

--- Later in debate ---

[George Freeman]

As I say, if any individuals feel that their conviction is unsafe, they can always explore the legal avenues open to them. Where large numbers feel that that is the case, as is alleged, it is perfectly possible for them to bring a class action together. I do not accept that there is a fundamental injustice in the process that prevents people from bringing claims. I accept, however, that it is absolutely vital, where there is a legitimate claim against the Post Office about how it has treated its sub-postmasters, that those claims must be looked at properly.

In the limited time available, I want to move on to the Post Office’s approach. Both tonight and elsewhere, my hon. Friend the Member for North West Leicestershire and others have raised the very serious dissatisfaction felt about the way in which the Post Office has handled relations with its sub-postmasters. When this debate was called, I spoke to the Post Office to understand the situation. I have received a letter from its chief executive, Paula Vennells, which I shall send to my hon. Friend and others who have spoken and place in the Library. The letter sets out just how seriously the Post Office has taken this matter. Ms Vennells says:

“We have gone to great lengths...because I was determined that, if there were problems with the Horizon system, these had to be identified and resolved.”

I will happily pick up any issues that my hon. Friend or others feel are not addressed in the letter.

As I have already said, the mediation scheme is rightly independent of the Government. It was established jointly by the Post Office and the Justice for Subpostmasters Alliance, working with Second Sight, and it is overseen by an independent chair, a former Court of Appeal judge. It is right that the details of individual cases should be confidential and that the Post Office respects that.

[Andrew Bridgen]

The Minister should be aware that one of the criteria given by the Post Office for removing cases from mediation was if a very large claim was involved. Those sub-postmasters who have suffered the greatest loss and the greatest injustice were therefore immediately excluded from the mediation system.

[George Freeman]

That is a very interesting point, which I will be happy to take up with my hon. Friend, perhaps in the context of what I am about to suggest.

Although it remains the case that there is no evidence that the Horizon system is flawed, if any individual feels that their conviction is unsafe, they can pursue the legal avenues available to them. I do not see any reason for the Government to intervene in this matter by instigating a full judicial inquiry. However, I am struck by the extent of the concern expressed tonight by Members from both sides of the House and during the lead-up to this debate, including some of the specific testimony heard tonight. I will be happy to convene a meeting in the Department, perhaps led by my hon. Friend, with the support of others from across the House—to deal with the point he has just made and one or two others that have been made this evening—and to invite the Post Office to come to that meeting with representatives of sub-postmasters to try to iron out the issues.

My hon. Friend has raised other points that are a matter for the Post Office, rather than for the Government. I have no doubt that the Post Office has listened closely to this debate and will be in touch with him to answer his questions. I agree with him that this matter has gone on for far longer than anyone would wish and, for whatever reason, has been the cause of huge difficulties, trial and unnecessary hardship for a number of the sub-postmasters who have been affected.

The important thing now is for the final cases in the mediation scheme to progress to mediation, and I urge all the parties involved to continue to work together to make that happen. That will help the individuals with cases remaining in the scheme to reach resolution, and it will mean that the Post Office can, working closely and collaboratively with its sub-postmasters, carry on with its essential role of serving communities.

I repeat that some of the points made tonight in the House merit investigation. I will happily convene a meeting in the Department to put those specific points to Post Office Ltd. The system may have generally worked well for the vast majority of users, but that in itself is no reason not to ensure that those who have been legitimately unable to deal with the system should not be penalised unfairly. They certainly should not be made the victim of criminal judgments when their crime is nothing more than being unable to cope with a new IT system. I look forward to raising those points with the Post Office.

Question put and agreed to.